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Blackstone Group: What Led to Strong Numbers in 2Q17?

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Strong results on YoY basis

Blackstone Group (BX) reported an economic net income of $705.0 million in 2Q17, which reflects a substantial rise of 36.0% on a YoY (year-over-year) basis. EPS (earnings per share) in 2Q17 was $0.59, which missed analysts’ estimate of $0.62. However, EPS in 2Q17 was a significant rise of 34.0% from 2Q16 on the back of significant growth in FRE (fee-related earnings) and funds appreciation. In 2Q17, the company’s DE (distributable earnings) was $781.0 million, a rise of 58.0% YoY. Total performance fees in 2Q17 were $757.0 million, of which realized performance fees came to $643.0 million. Realized performance fees were driven by realizations.

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Blackstone’s FRE in 2Q17 stood at $311.0 million, reflecting a substantial rise of 33.0% YoY. Its total AUM (assets under management) was $371.1 billion, which was a rise of 4.0% YoY, was mainly due to organic expansion, fundraising, and a significant appreciation of funds. The company deployed $8.4 billion in 2Q17.

Operating margin

Blackstone’s (BX) operating margin on a TTM (trailing 12-month) basis was 48.6%. Operating margins of alternative asset managers (XLF) on a TTM basis are as follows:

  • Apollo Global Management (APO): 47.6%
  • KKR & Co. (KKR): 56.3%
  • Carlyle Group (CG): 26.9%
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